STATIC ECONOMICS AND BUSINESS FORECASTING 7 
static doctrine. The forces governing the international move- 
ments of goods, for example, the forces governing the international 
movements of gold, the larger laws of the balance of trade and 
of the international balance of indebtedness—static theory has 
gone far in explaining these things. Static theory has analyzed 
the conditions which make certain factors of production easily 
mobile while others are fixed or relatively immobile. 
One of the most significant of the generalizations of the static 
economist has been that worked out by J. B. Say and beautifully 
stated in English by J. E. Cairnes—the doctrine that there can 
be no such thing as a general overproduction, the doctrine that 
consumption and production grow together, and that increasing 
production leads to increasing consumption—so long as the pro- 
portions of industry are kept right. That there can be over- 
production in particular lines the doctrine grants—too much of 
one thing produced and too little of another. Particular over- 
production can, moreover, demoralize the whole economic fabric 
and force general reaction and disorder. But business can be 
counted on to go on steadily so long as equilibrium is maintained. 
Wheat comes into the market as supply of wheat. Well and 
good. But the wheat produced constitutes demand for silk, 
for sugar, for automobiles, for other things that the wheat pro- 
ducer wants. That is why he is producing wheat. Silk comes 
into the market as supply of silk, but also as demand for other 
commodities which the silk producer wants. And so with every 
other commodity—it is supply of its own kind, but it is demand 
for other things. And therefore, in the aggregate, supply and 
demand are not merely equal; they are identical, since every 
commodity may be looked upon as supply or demand.” 
Conclusions on all of these topics have much to do with the 
problems in which the business forecaster is interested or ought 
to be interested. And yet practical business men and practical 
students of business forecasting for the most part either have not 
studied this static theory at all, or else after trying to study it, 
! This brief statement involves a use of the terms, demand and supply, 
which does not fit into our conceptions of demand and supply as expressed 
in the modern curves, which involve the idea of money and a fixed value 
of money. (Cf. my Value of Money, Chapter II.) If it were necessary 
for the purposes of the present article to be particularly precise in my 
reference to specific doctrines, I should want to reformulate this, but it is 
adequate for present purposes to state the doctrine in the way in which 
Cairnes states it.